E-commerce plays a big role for many SMEs. In fact, many startups and home-based entrepreneurs rely solely on online selling platforms to create, maintain and develop their businesses. With its popularity continuing to expand, e-commerce is changing the game for businesses in the Philippines and all over the world. Norland Templo, Director for Operations at leading e-commerce service provider aCommerce, discusses how to make the most out of your business online.

What do you think is the biggest advantage of having an ecommerce platform?

One of the biggest advantages of an e-commerce platform is the customer experience. One of the reasons why e-commerce was born is convenience of shopping. In the Philippines, we have a lot of business process outsourcing, traffic, challenges in terms of payments, very small credit card penetration … and e-commerce has given solutions for that.

Another thing is there is convenience of returns. For example, if you [look at] the largest marketplace here in the Philippines, Lazada, one of its selling points is that in terms of no returns, no question asked. You saw a problem with the product, drop it off in any of the [warehouses], they will accept the returns.

So there’s convenient shopping, convenient returns, and most importantly there’s convenient selling. For certain marketplaces, it’s not all about customers. It’s also all about seller experience. You want to grow the industry. You want more and more companies to sell online. So with this particular channel, it has opened opportunities not only for huge brands and retailers, but also for small and medium-scale enterprises that have simple businesses. Now they have one channel that will do the fulfillment for them, will do delivery for them, [and] will do handling of customer service for them, all in one package.

Are there any common misconceptions about e-commerce?

I think one of the most [common] misconceptions is that if you want to go into e-commerce you just have to have a product, then have an online site, then wait for customers to come in, and then it will suddenly be a success story. It’s not always like that.

For offline businesses there’s a brick-and-mortar store that people can see, can go to. When they pass in the street, they can have an association with it, unlike in [an] online business. People have to know that a certain “something.com” or “something.com.ph” actually exists, so that means there should be marketing. You should be present in different social networking sites so people will know you have an online selling site. Because without people knowing this, you won’t have traffic, you won’t have conversion, and then you won’t have revenue.

Then, you [should] have a scalable website with multiple payment methods – very important – and you should also have a particular fulfillment center or a small warehouse.

And one thing I can share is that online shoppers are actually not one-time buyers. It’s a common misconception. The behavior, actually, based on research, is that once an online shopper, always an online shopper.

There is what we call now an “E-commerce 2.0.” E-commerce is not just all about having low prices […] it’s now all about customer experience. E-commerce customers are very demanding. So when you give them a promise, for example 2-3 days in Metro Manila, you have to deliver in 2-3 days, or these particular customers will be irritated, or worse, they won’t be buying again in your online shop, or they will tell people of the bad experience.

[There’s a real challenge of retaining and keeping the customers.] When you’re starting with your online business, it is obvious that focus is on acquisition. And then, as you grow the business, it slowly transitions … the focus now is on retention, on how you target the customer lifetime value of each and every customer that you have online.

What are the common mistakes that businesses make when going into e-commerce?

They tend to picture e-commerce as a channel that will give them instant return, and they will only put in additional money when they start to see revenue coming in. You’ll be surprised that for brands that want to go into e-commerce, only a very few are actually willing to shell out money for marketing effort. 25% would not spend $20,000 per year – that’s less than a million in peso per year. In e-commerce terms, 1-million-peso budget per year is not even enough to have your own website, much less do fulfillment of orders. So that’s one of the problems: that they just tend to put additional cash when they see revenues coming in, when it should be the other way around.

One thing also is that for companies who are transitioning – for example, they already have businesses that do B2B; they sell to different stores – they have to realize that e-commerce is very different from B2C. Fulfillment in e-commerce is on a per item method, meaning the fulfillment process and the delivery process is completely different. That’s one thing these particular companies should be aware of. […] It’s very important to partner with somebody who knows all these things, and how to manage this last mile in the fulfillment process.

How has e-commerce impacted the business landscape in the Philippines?

There’s a strong indication of e-commerce starting to mature in the Philippines because brands are now hiring e-commerce managers, creating e-commerce teams, creating e-commerce head positions within their organization. This is an indication that different companies are now starting to accept online selling as not just of the avenues where they can create revenue, but one of their channels. Another thing is that e-commerce can actually make the products available to customers faster. In the online setting, which used to be C2C – and now there’s also B2C, B2B, and now B2all – certain brands can actually sell directly now to customers, making products more available to different customers wherever they are in the Philippines.

There are challenges also along the way. There is still scarcity in terms of talents, in terms of people who actually know e-commerce. A common mistake of organizations is that because of their drive to have an e-commerce business or channel, [when] they want to create a team, they get brand managers or brand people to manage the e-commerce line of business. It’s totally different.

What e-commerce trends do you foresee happening in 2017 and beyond?

There will be more brands selling online in the Philippines. We have experienced, during the latter part of 2016, different huge brands approaching us and wanting to sell online. They will be onboarded in different marketplaces; it does not necessarily mean that these brands will have their own “brand.com” – we are helping them go onboard in Lazada or Zalora or different marketplaces in the Philippines.

In terms of logistics, we see more clients or companies demanding same-day delivery. As I’ve mentioned, customers are now starting to be more demanding of e-commerce, so instead of the usual 2-3 days within Manila, one of the things we see for this year is that there will be more requirements for same-day delivery.

In terms of assortment, the opportunities abound. We have had people wanting to sell online not only for consumer electronics, mobiles and tablets, home furniture, etc. but also consumer goods and even groceries.

And lastly, there will be more international brands coming in. Cross-border trade has been one of the reasons why e-commerce will be booming in 2017. The ASEAN Economic Community (AEC) has made cross-border trading more convenient for different organizations. It even allows for the trade of talents from one country to another. […] It works both ways. It means that if brands from other countries can sell in the Philippines, sellers and brands here in the Philippines can sell and have their products available in other countries. It’s very promising.